Abstract:

The costs of unsuccessful hiring decisions might be unbearable for small and medium-sized enterprises (SMEs). At the same time, many Finnish SMEs are struggling with employee selection. The SMEs mostly rely on interviews, and they do not usually use any tests or outside help. Digitalization is also making its way to recruitment and employee selection, but for the SMEs the question remains: what tools and methods should be used in employee selection? There is a lot of previous research studying different employee selection methods, but basically no research that would combine the methods and suggest an employee selection process specifically for SMEs.

This thesis studied how SMEs should develop their employee selection process. The study applied a qualitative research approach, and data were collected with theme interviews. The interviewees were employee selection specialists from three top-class SMEs, a human resources manager from a global top tier management consulting company, two psychologists working with employee selection and headhunting, a professor of psychology, and a recruitment and employee selection specialist who has acted as an adjunct professor. The data were analyzed with an abductive perspective utilizing a thematic analysis method. Generalized statements, direct quotes, tables and figures were used to introduce and review the results.

The main findings of the study suggest that SMEs should use objective and structured selection methods such as structured online application forms, structured interviews, work sample tests, cognitive ability tests and structured reference checks. Furthermore, the assessment should be objective and utilize a screen out approach, where applicants are compared to predetermined cutoff scores. In SMEs the subjective feeling of whether the assessor wants to work with the applicant or not is a necessary, but not a sufficient condition. The subjective feeling should not affect the objective assessment of the applicant’s skills and abilities. Lastly, the job analysis phase is highly crucial in SMEs, and general mental ability (GMA) and previous work experience are often important selection criteria.